San Diego Housing Market 2022: Prices, Trends & Forecast
The San Diego housing market was one of the hottest markets. As people flocked to San Diego, houses were sold at record-high prices. Investors swiped up houses soon after they were placed on the market. However, this red-hot market might finally be cooling off quite a bit. This blog will tell you everything you need to know about the San Diego housing market.
San Diego Housing Market Prices
Housing market prices are slowly cooling off in the San Diego housing market. In July of 2022, the average cost of a single-family house was almost $970,000.
Some websites have placed that dollar amount much higher. Redfin stated that the median price of single-family homes was just over $1 million.
According to Redfin, the median price of all houses sold was approximately $875,000. Keep in mind that this takes all housing types into consideration, not just single-family homes. That was an increase in the median price of almost 11% yearly.
Home sales saw a drastic decrease yearly, but market experts attribute that to a combination of inflation and the market slowly correcting itself.
Inflation has risen at a record-breaking rate in the United States. More families that earn upwards of $90,000 are struggling to feed their families. The average salary in the San Diego area is $70,000. This, combined with increasing mortgage rates, has resulted in fewer families being able to afford to buy houses. In fact, for professional companies that buy houses in the San Diego market, flipping houses is just that much harder, due to climbing rates.
Mortgage rates have continued a steady climb since the beginning of the year. Investors are snatching up homes before the rates go higher. However, the higher mortgage rates have left many families cautious about entering the market.
Those entering the market keep the climbing interest rates in mind. Only about 46% of homes sell for a price above the list price. Approximately 45% of homes on the market have had price drops to make them more appealing to buyers.
San Diego Housing Market Trends
So far, the purchase of single-family homes continues to decrease. According to the Greater San Diego Association of Realtors, July of 2022 saw a 22% decrease compared to June.
Year over year, home sales decreased by approximately 43%. Only 888 homes were sold in July when looking at all housing types.
Approximately 444 of those homes were single-family homes. That is almost a 44% decrease year over year. Single-family homes spent an average of 17 days on the market. That’s a 7 day increase year over year.
Townhouses did not see as much of a change in the market. Year over year, there was a 7% increase in price for a median price of $765,000. Townhouses spent an average of 13 days on the market, for a 4-day increase. As with other categories, sales are decreasing. Only 121 in this category were sold, a decrease of approximately 19% yearly.
According to the National Association of Realtors, home sales have steadily fallen for six months.
However, a housing shortage is still keeping prices higher right now. The demand for housing in this desirable area has continued to outpace the houses on the market. At least, up until now. The drastic decrease month over month may signal that the housing supply finally has a chance to catch up.
Houses are spending more time on the market. Some houses are sitting on the market for 30 days. Others are not being sold at all.
Realtors are seeing houses spend an average of 15 days on the market, a five-day increase compared to last year.
The trend of slowly decreasing prices also continued in July. While $970,000 is still high, it is a 1% decrease compared to the previous month.
Over the past two years, housing prices in the San Diego market have soared. The number of people paying above list price hit an all-time high, but it started to decrease in early 2022.
San Diego Housing Market Forecast
The San Diego housing market was one of the hottest housing markets in the nation for two years, but it is finally cooling off. When this cooling-off period began at the beginning of the year, many people watched and waited. Now that months have passed, it’s become evident that it’s here to stay.
As inflation takes its toll and mortgage rates to increase, fewer home buyers will enter the market. This will result in the housing supply slowly going up. Buyers in the area will have more homes to choose from, and realtors will finally be able to take a day off.
However, this isn’t going to turn the San Diego market into a buyer’s market. For that to happen, there needs to be at least a six-month supply of houses on the market, and it would take years to accomplish that in the San Diego area.
Instead, things will cool off enough that buyers can afford homes again as long as inflation doesn’t persist. The prices will balance out so sellers can make money, but buyers are interested in buying homes again.
The high demand for housing continues to outpace the record at which houses are being built in the San Diego area. Because of this, it’s highly unlikely that the housing supply will reach a tipping point in the buyer’s favor.
The market will continue to correct itself in the same manner seen today until housing prices reach a lower price. It will not be a housing bubble burst like we saw in previous decades.
Buyers are waiting to buy if they can, and that’s a good idea. Although interest rates are expected to climb higher, they will come back down eventually. Sellers interested in selling their house quickly in San Diego should now put their homes on the market to ensure they sell fast. The cooldown in the San Diego housing market is going to continue. Check out what’s happening in housing markets around the nation, like the Dallas housing market or Orlando housing market!